Retirement benefits an maturity
As a rule, the retirement benefits offered by the IntegralStiftung become payable when the insured person reaches standard retirement age. The retiree must take this money either as a lump sum or as a combination of capital and a pension. This is because, for tax law-related reasons, insured persons are not allowed to leave their money with the IntegralStiftung as a private interest-bearing asset investment.
Increased or lower retirement assets
Your pensions assets include the following items among others – any vested pension benefits which have been transferred; retirement credits as envisaged by the pension plan; repayment of advance withdrawals; personal payments in the form of “voluntary participation”; buying into insurance benefits following a divorce or dissolution of a registered partnership; etc. Any interest earned will also be credited to your pension assets.
Pension capital will be reduced if you make advance withdrawals to facilitate home ownership.
Pay-outs following a divorce or dissolution of a registered partnership can also result in reductions in benefits.
Possible contribution shortfalls
As a rule, contribution shortfalls in your retirement savings account are caused by increases in salary. They can also occur after a divorce or dissolution of a registered partnership because the courts have ruled that ex-partners must be given a share in pension assets.
The following can also cause a shortfall in contributions – relocation inside of Switzerland or taking up paid employment after the age of 25; an increase in retirement credits or gaps in employment, for example due to unemployment, time spent abroad, university studies, sabbaticals, parental leave, etc.
“Voluntary participation” in a pension fund is an option for anyone who wants to increase their personal pension assets and save taxes.
This kind of private participation can be declared as a Pillar 2 contribution, resulting in tax benefits. It is, however, essential that 100% of any such “voluntary participation” to the pension fund is financed by you only.
It is also important to be aware that “voluntary participation” will tie up capital in the long term. As a rule, it is forbidden by law to withdraw money which has been paid into a pension fund, even if you are in sudden, urgent need of this money for other purposes. This is one of the differences between a pension fund retirement savings account and a bank account, from which you can withdraw money as required.
As a matter of principle, contribution limitations do not apply to voluntary participations made to offset pension asset splitting after a divorce.
Participation and BVG regulations
The BVG specifies three preconditions for “voluntary participation”, namely:
You are in employment and your employer has registered you with the pension fund;
The pension fund’s regulations and/or pension plan envisage voluntary participation (in the case of the IntegralStiftung, yes);
There is a shortfall in contributions which will result in a reduction in pension benefits.
The BVG lists the following criteria as limitations on “voluntary participation”:
Any accruals which you have for vested benefits accounts or policies must be deducted from the maximum voluntary participation sum;
Any advance withdrawals for encouragement of home ownership must have been repaid in full before you make voluntary contributions;
If you have immigrated to Switzerland from abroad and have never been a member of a Swiss pension fund before, any voluntary contributions you make in the first five years may not exceed a sum equivalent to 20% of the insured salary.